Paying in extra contributions for your Persoonlijk Pensioen Plan

Do you think you may not have enough income at your retirement date? In that case, you can opt to pay in extra money for your Persoonlijk Pensioen Plan. In this way you can accrue supplementary pension for yourself and for your partner in the event of your death. Below, we explain how this works and how you can decide whether this is a suitable solution for you.

What does paying in extra contributions involve?

Your employer pays premiums for your pension. It is possible that you also pay something towards it. The amount of the premium paid in for your pension depends on your employer’s pension scheme. We invest this ‘defined contribution’ for you. The higher the premiums paid in, the higher your pension can be. Would you prefer to have a higher pension benefit? If so, you can opt to pay in extra contributions for your pension.

Is paying in additional contributions a suitable solution for me?

Paying in additional contributions is not necessarily always the best solution for arranging a supplementary pension.

How much can I pay in as additional contributions?

• You cannot make unlimited additional contributions. There is a statutory maximum. The level of this maximum depends on the situation. It is possible to accrue pension via your employer with a tax advantage, but this is subject to statutory limits. Within those limits, you may have tax scope to accrue income for later. If your regular pension scheme does not fully utilise the scope, you will be able to pay in additional contributions with a tax advantage. The amount you can pay in depends on how much pension you are already accruing. This is different depending on the pension scheme and the person. We will calculate how much you can accrue with additional contributions, in addition to your Persoonlijk Pensioen Plan.

Your statutory maximum may be lower than the minimum contribution. This may be the case for a lump sum paid in, for monthly premium contributions or for both. In that case, you will not be able to pay in additional contributions (either on a once-only and/or on a regular basis) at that time. However, it may become possible again to do so later on. For example, your tax scope may expand if you start earning more.

Note!

Do you want to pay in additional contributions and are you already accruing income for later with a tax advantage via a life annuity or blocked bank savings? In that case, you are already using the fiscal scope (partially). In such a situation, it is a good idea to get in touch with a financial adviser. A financial adviser can tell you the maximum you can still pay in for your Persoonlijk Pensioen Plan.

Are you paying in too many additional contributions for your Persoonlijk Pensioen Plan in addition to your life annuity or bank saving product? In that case, the Tax Administration may reverse your tax advantage for your life annuity or blocked bank savings, which can cost you a lot of money.

What do I get for my additional contributions?

The following is arranged if you pay in additional contributions:

• You receive a pension for yourself. Paying in additional contributions is a form of investment-linked pension. Consequently, it is impossible to say how high your pension benefit will be. The value of your investments we become available on your retirement date, and you will be required to purchase a lifelong pension benefit using this pension capital.
  
  
• If you die after your retirement date, there is normally a partner’s pension available. In that case, the benefit paid to your partner is usually 70% of the amount of your own pension benefit. You can opt to purchase a lower or no partner’s pension after your retirement date, in which case your own pension will be higher. If you have a partner, you will require his or her permission to make this choice.
  
  
• If you die before your retirement date, it is possible to supplement the partner’s pension and the orphan’s pension, if applicable. If you die, an amount will be released for your partner if you have one. In that case, your partner will be required to purchase a lifelong benefit for themselves. If the benefit is higher than the statutory maximum, any remainder will be for any children you may have (provided they are younger than 30 years). They will be required to use these funds to purchase a temporary benefit. The level of the amount that is released depends on the value of your investments at the time of death. You can find more information on this supplement in tier 3 of your Pension 1-2-3, in the pension regulations.
  
  
• Have you already been paying in additional contributions for at least two years and have you become either fully or partially occupationally disabled? In that case, your additional contributions will continue. Depending on the degree of your occupational disability, we will take over the premium payment from you, either fully or partially. For this insurance, your employer pays a risk premium. In other words, you do not pay it yourself.